USDA trims corn, ups wheat stocks

The big number traders were watching ahead of Thursday morning's USDA grain supply and demand reports -- Argentina's corn crop size -- came in at the low end of trading estimates, representing a potential bullish jolt for the grain trade Thurday if USDA's wheat numbers don't offset them.

Thursday's World Agricultural Supply and Demand Estimates (WASDE) report shows Argentina's corn crop at 22 million metric tons (mmt), down from last month's estimate of 26 mmt and reflecting damage from a hot, dry growing season and putting pressure on U.S. stocks to fill that void on the world market.

"Argentina corn production is lowered 4.0 million tons to 22 million as
field reports confirm that high temperatures and extensive dryness
during pollination in late December and early January resulted in
irreversible damage to early corn in the central growing region,"
according to Thursday's WASDE report. "Late planted corn, which has been
on the increase in recent years, will help offset some of the earlier
losses, but additional rainfall is needed to stabilize production
prospects."

Another key number in Thursday's report is in the wheat sector: USDA
trimmed U.S. wheat ending stocks from last month and raised exports by
25 million bushels. But, it bumped global wheat stocks by 2.1 million
tons, making the wheat complex a possible weight on any upward movement
in Thursday's trade.

"It's pretty much a flat report. The world wheat number did grow, so
that may offset the corn number," says Don Roose, trader and analyst
with U.S. Commodities in West Des Moines, Iowa. "It's kind of a jump
ball; the outside markets are firmer, but the world wheat stocks could
move things lower."